5 Reasons You Should Hire an Accountant for a Small Business

Hiring an accountant for your small business saves money and gives you an edge over your competition. Your accountant achieves this by doing your taxes, advising you throughout the year on important business decisions, and contributing to a potential audit defense by ensuring their work is accessible and error-free. 

Many small businesses, particularly first-time owners, opt to manage their finances themselves and do their own small business accounting. Handling basic accounting tasks may work at first, but as time goes on and a small business scales up in complexity, things can spiral out of control fast. 

If you've ever asked, "Should I hire an accountant?" or "Why hire an accountant?" or "When should I get an accountant?" this is the blog for you. Use it as your guide to the top 5 reasons you should hire an accountant for your small business. 

Does a small business need an accountant?

Small businesses do not need an accountant to operate, nor does the law require it. Many owners will handle accounting duties, do their books, hire employees, and coordinate projects, among other responsibilities.

Small business owners wear many hats, especially as things are getting off the ground, but accounting shouldn't be one of them. Some capable owners and entrepreneurs may be able to handle accounting responsibilities initially, but as their small businesses grow, they benefit from the service and insight only a trained professional accountant can provide.  

What does an accountant do for a small business?

An accountant generates actionable business insights, provides professional advisory, and gives small business owners peace of mind.

Your accountant's ultimate goal will be to minimize your business's annual tax burden. They'll help keep more of your hard-earned money in your pocket by doing your business taxes, evaluating your entity structure, providing year-round advisory, and more.

Your accountant's work will be ready for IRS scrutiny, giving you the peace of mind of knowing your finances are in good hands as you focus on growing your business. The last thing you want is unnecessary distractions and unforced errors to slow momentum. 

Top 5 Reasons you should hire an Accountant for your small business

Do you need an accountant for your small business? These top 5 reasons support hiring an accountant for your business needs.

Reason 1: Time management

Time is a precious commodity, and most small business owners and entrepreneurs never seem to have enough. Using an accountant benefits you from the service and the extra time you'll save.

Accounting is very time-consuming, especially as your business grows and your tax situation becomes more complex. When you hand your accounting responsibilities to a professional, the frustration and uncertainty lift away, and you regain the precious time you can devote to other aspects of your business. 

Reason  2: Expert knowledge and skill set

Your accountant is certified by your state's examining board and is held to the highest professional standards of conduct. Some accountants are generalists, while others have a specific focus or specialty. This focus could be on industry, business type, region, etc. 1-800Accountant's focus is to serve the needs of small businesses in every industry and state with accounting services designed to promote growth.

Accountants will apply their skills to numerous tasks, some more complex than others. For instance, your accountant can provide advice about your business structure and help you legally form if you have yet to do so in your state. Selecting the correct business structure can significantly impact your taxes, potentially saving you thousands annually, and your accountant's insight and expertise can immediately impact that area of your small business.

Other ongoing business concerns need your accountant's attention, which is where year-round tax advisory can help. With tax advisory, your accountant provides strategic advice to your small business, which reduces your liability while maintaining compliance. Depending on the type of legal entity your business is formed as, they can also provide additional financial planning services, including loan agreements, deadlines, and more.

Reason  3: Cost-effectiveness

Your accountant's goal is to accurately record your financial performance and save you the most money that is legally allowed. Certain accounting services are also tax deductible, adding to your savings. A capable accountant, paired with a long-term strategy tailored to your small business needs, can produce substantial financial savings year after year.

Your accountant's services, including tax planning and payroll, support that long-term strategy. The insights gained will help your present financial situation and allow you to steadily scale your business as it matures. Making data-backed business decisions is a great advantage over competitors that do it themselves.

But that's not the only way an accountant can save you money. Your accountant will also identify and correct common financial mistakes made prior to hiring. There is no shame in making a mistake, but failing to correct them can impact your bottom line, ultimately restricting your business's growth.     

Reason  4: Compliance and legal issues

Your small business must follow many rules and regulations, which can change yearly. It's part of your accountant's job to be familiar with applicable state and federal laws to ensure your financial records and reporting are up-to-date and compliant.

Some of the ways your accountant can maintain your small business compliance include: 

• Filing relevant legal and compliance documents
• Keeping current on the newest tax laws impacting your industry
• Preparing annual account statements 
• Maintaining current records that are ready for external inspection

Not only does remaining compliant benefit your business by helping free up cash flow and make data-backed decisions, but it's also crucial when you run into legal issues or an audit. While it's never fun to go through audits or legal problems, there is comfort in knowing your materials are correct and that you've done your part in staying compliant.  

Reason  5: Strategic planning and growth

A great benefit of using an accountant all the time is they can free up for you to focus on growing your business. But what happens when you get inconsistent results or don't know how to scale your business efficiently? Your accountant can be instrumental in your strategic planning and growth, too. 

Part of your accountant's job is to track your financial performance and provide reporting and analysis that accurately reflects your situation. The materials and insight are key to empowering you to make data-backed growth decisions for your business. The accurate reporting of this data lets you see the complete picture of your financial health and helps you avoid an overreliance on past successes and gut instinct.    

Data shouldn't be your only consideration when making decisions that impact your business's long-term prospects, but it can help. It also puts into perspective your competitor's struggles when they do their accounting. Lacking a professional accountant and the accurate data they generate is a severe disadvantage for any small business hoping to grow and compete.

How 1-800Accountant Can Help Your Small Business

While an accountant is optional for your small business, hiring one can be essential to your success. Whether you want to improve your time management, refer to an expert, improve cost-effectiveness, increase compliance, or formulate a long-term strategic growth plan, bringing on a qualified, trusted accountant is for you.

Hiring a CPA for your small business can be difficult, which is why so many owners and entrepreneurs trust 1-800Accountant, America's leading virtual accounting firm for small businesses, for their accounting needs.

Whether it's small business taxes, tax advisory, or any of our professional accounting services, we have the solution your business needs at a price that works for you. Schedule a quick consultation – usually 30 minutes or less – to learn how we can help.